Murphy Oil Corp. Chief Executive David M. Wood said that the company’s Gulf of Mexico production could shrink by as much as 30% in 2011 amid continuing uncertainty over U.S. deepwater drilling.

The U.S. government’s moratorium on deepwater drilling that was lifted last month “still has a long shadow that’s cast over our business,” Wood said, speaking on the sidelines of the Wall Street Journal’s CEO Council conference.

Enacted in the wake of BP PLC’s (BP, BP.LN) deadly Deepwater Horizon oil spill and the subsequent 4.9-million-barrel oil spill, the deepwater drilling moratorium shut down for five months. And despite the ban’s lifting, government approval to drill new wells in depths greater than 500 feet has been slow to resume.

Murphy removed one of its two deepwater rigs from the Gulf of Mexico – a Diamond Offshore Drilling Inc. owned rig that was moved to West Africa – and the other remains unable to work off the U.S. coast. Wood said the company has applied for permits to restart drilling with its remaining rig but has so far not been granted permits.

“We were fortunate to be able to relocate” one of the rigs, Wood said. And though Murphy has said it will concentrate U.S. efforts on the oil-rich Eagle Ford shale formations in south Texas, 80% of the El Dorado, Arkansas company’s energy production efforts will take place abroad.

The company plans to hire in 2011, but those employees will “invariably” work outside the U.S. or on a project beyond the country’s boarders, Wood said.

Earlier this year Murphy announced plans to shop its three refineries, each located in the U.S., but Wood said those deals won’t likely be completed until 2011.